The Weird Case Against Media Matters's Non-Profit Status

Over the weekend, Politico's Ben Smith reported that the George Soros-funded liberal activist organization, Media Matters, was "quietly" launching an "all-out campaign" of what the organization's CEO David Brock called "guerrilla warfare and sabotage" against Fox News. It's unclear what this new campaign will consist of (O'Keefe-like sting videos?), as the organization has already been dutifully documenting every hypocritical tidbit, embarrassing gaffe, or phantom scandal that the "nerve center" of the conservative movement, Fox News, has allegedly committed.

But, according to Brock, Media Matters is marshaling its considerable forces ($10 million dollar a year budget and staff of 90) to do whatever it takes to discredit Fox News and its parent company News Corp. The strategy, he says, has shifted from "containment" to "war on Fox." Unfortunately, leaving questions of the organization's diminishing credibility through shrill reporting aside, Media Matters may have a bigger problem: its new "war" may lose the organization tax-exempt status.

At the (conservative-leaning) Washington Examiner, Mark Tapscott notes that currently Media Matters is classified as a 501(C)(3) tax-exempt educational foundation, which puts it in the "non-profit, non-commercial sector, and it also bars the organization from participating in partisan political activity." He notes that "this new, more aggressive stance, however, appears to run directly counter to the government's requirements for maintaining a C3 tax status." The official purpose of Media Matters, says its tax return, is that it's "dedicated to comprehensively monitoring, analyzing and correcting conservative misinformation in the media."

There appears to be one potential snag in Tapscott's reasoning, however. In order for the IRS to decide that Media Matters should lose its tax exemption, it would also need to formally declare Fox News a partisan appendage of the Republican party, a conspiracy theory that Brock has long pushed. That's unlikely, to say the least, so it would seem less likely that Media Matters will lose its tax-exempt status anytime soon.